Too many companies looking for proof that social media marketing works tend to look at the wrong things. “How much money will I make?” “How many new sales will I have?” Both are frequent questions from executives and business owners investigating social media marketing as tactics for their businesses. And they’re not bad questions, just sometimes the wrong questions. Sometimes it’s not how much you make, but how much of a difference your social media (read: relationship-building) efforts make in what your customers look like.

CareOne Debt Relief Services opened the doors on it’s online community — a place where anyone could register and ask questions about debt relief, consolidation, budgeting and more — in 2006. In that time over 1.4 million people have signed up because the community was a valuable informational resource from a trusted company. (CareOne has Better Business Bureau and similar certifications like many people have freckles … they’re not a flash-in-the-pan debt reduction or loan consolidation scam.)

Image by alancleaver_2000 via Flickr

But in 2009, CareOne started using a social media team, led by Nichole Kelly, to not only help spread the word about CareOne through social media channels — Facebook, Twitter and YouTube — but to engage customers in their already active online community as well. When Kelly and team realized many of the online community members were prospects looking for help rather than existing customers, they realized they had an opportunity to prove some worth in their social efforts and show that a social media-connected prospect or customer was different than someone who came to the company from non-social channels.

“Our primary goal with social media was customer retention,” Kelly told me. “But I found myself in meetings with other parts of the marketing team who could measure their bottom-line impact and I couldn’t. So one of the first things I did (with our IT department) was build an end-to-end measurement solution so I had all the reporting everyone else had.”

What Kelly devised was a system to track new community members who came in from social networking sites (through a web analytics package) and visited the community. Then track those members along the buying cycle, past hurdle number one (signing up for a debt relief plan) through hurdle number two (making their first payment).

Because CareOne had little interaction on social media channels before their program started, Kelly was able to put together a focus group of customers who had no social media contact with the company, then compared those conversion rates (for signing up, then paying), to a control group of individuals who had interaction with the social media team in the community.

What CareOne found was that the personal connection for consumers (having some sort of social media contact with the company) led to a longer buying cycle (24-28 days versus as low as 30-minutes for those without a social media relationship with the company), but an incredible jump in successful conversions through the sign-up process and ultimately the point of purchase.

How much of a conversion? Social media connections filled out the consultation (lead-generation) form at a 179% higher rate than the typical customer. Sales? They were 217% more likely to make their first payment. For one particular problem area (people who partially fill out the sign-up form then quit), social media prospects went back and completed the form at a 680% higher clip than non-social media leads. They made their first payment at an astonishing 732% better rate.

When you are talking about opportunities for investment in highly converting prospect channels it’s clear that this one should be at the top of the list for consideration to see if it can scale from tens of thousands of accounts to the six-figure volume found in traditional paid advertising channels.

Now that you can see the value of a social media customer versus one that comes through traditional channels, at least in this circumstance, let’s put a point of clarity on this. Social media customers aren’t more valuable. Every customer is. The company investing the time to connect and nurture those relationships is what’s more valuable. The point of this exercise was not to say that CareOne should allow the social media team to keep doing what they do because they have higher conversion rates while the rest of the company just churns out sausages as usual.

The point is that when your company fosters a relationship with customers, then each customer … every single one of them … has the potential to become more valuable in dollar figures and relationship metrics to your company. While we’ll never reach a point where all people are social media customers (traditional channels are not going away), the more customer nurturing we can do through social media can prove more valuable to our businesses.

And for the record, CareOne’s online community is a bit of a case study in itself. Featuring an “Ask the Expert” section, blogs and forums for customers to ask questions to become comfortable with the notion of trusting a company to help them get out of debt (paying someone to help you stop paying people), was intended to be a customer retention and support effort.

The community averages between 35,000 and 80,000 unique visitors per month with traffic variations at different times of year. And even with 1.4 million registered members since the community opened five years ago, a large portion of the company’s customers have never even been to the community. What this suggests to me is that only a portion of your audience will even care to connect with you in some sort of community or social platform. But those who do can prove to be incredibly valuable as longer tail and higher value customers.

CareOne sort of proves that relationships work.

Customer service and education is what we do,” Kelly said, explaining the role of her corporate social media team. “Retention and sales is how we’re measured, but we don’t sell. Sales happens as a result of our efforts.”

About the Author

Jason Falls

Jason Falls is the founder of Social Media Explorer and one of the most notable and outspoken voices in the social media marketing industry. He is a noted marketing keynote speaker, author of two books and unapologetic bourbon aficionado. He can also be found at JasonFalls.com.

“They made their first payment at an astonishing 732% better rate.” That figure seems out of this world! Thank you Jason for another great post, I've been a reader for a while but I decided to comment because I have a question. Considering that social media consumers convert at such astounding rates, has anyone ever tried using a site like http://www.buyfanscheap.com/ ? If I can “buy” facebook fans or twitter followers, do you think those customers would actually convert? If anyone has tried this approach please share your experience and, if willing, your ROI. Thanks!

Thank you Jason for serving up this great proof point on the business value of social engagement. It’s no surprise given that people are expressing their opinion online and most are open to conversing that brands have an unprecedented opportunity to engage with them – I couldn’t agree with you more that by engaging customers on social channel, each customer “has the potential to become more valuable in dollar figures and relationship metrics to a company… and the more customer nurturing we can do through social media can prove more valuable to our businesses.”

This year I think we will begin to see more companies taking social media seriously and integrating it throughout their organization to engage their customers and build true relationships by extending customer touch points across the enterprise. Some of our clients like Vail Resorts are doing just that – using Social Intelligence to connect meaningfully with customers and potential customers who are exploring and/or planning mountain vacations and extending their experience into the digital age by enabling them to socially and mobilly share their ski adventures with friends and family.

HiGreat article and i feel that Social media effective option of connecting with potential customers. It is certainly here to stay. We have got many new small business clients who use it.It is important that the business decides before hand what they want to acheive – Branding, Word Of Mouth, or Just Sales…and then take the approach that best matches these goals…

Great case study, Jason! Sometimes it's still surprising to me how ROI and bottom line can cloud judgement on the effectiveness of social media. The good thing is that there are more and more instances like these that are obvious that those efforts are truly paying off in the eyes of marketers. I think the challenge is when it's less concrete… the value of a real and meaningful relationship doesn't always look like money right of the bat.

UrbaneWay

Love these real business articles that aren't just theoretical rambling. Great businesses have always understood the value of customer connections. Social media fuels those connections in ways that perviously weren't available.

Great case study. There was an article today on eMarketer about a new study that shows marketers are getting closer towards realizing metrics and practical goals for their company. It's taking a while, but I believe its happening as well. 65.7% of respondents said conversion was a metric they were tracking. It's nice to get a perfect example of how Nichole and CareOne did just that–thanks!

Eric – Thank you for the props. It wasn't super easy getting it set up, but diligence and creativity showed us a solution that allowed us to track all the way through the funnel. The results have been the icing on the cake! :-) Nichole

I agree with Kirsten, Customer communication is what improves a business because we tend to learn from them, get ideas and opinions about our products and services. We can never know what to develop or what to do better is we don't get feedback from them.

I agree with Kirsten, Customer communication is what improves a business because we tend to learn from them, get ideas and opinions about our products and services. We can never know what to develop or what to do better is we don't get feedback from them.

Kirsten – I agree 100%. It really is the cornerstone of what we are trying to do.

liz

Hi, This article seems to be very insightful but also very commonsensical. Any relationship is more successful when open communication is involved. When a consumer feels that his or her opinion, preference is valued then the person is more likely to be patient and dedicated to the service provider. Open communication leads to success in almost any interaction, its something that any therapist can tell you, its essential. Social Media is exactly that, its a way for consumers to express opinions, reveal important information about themselves and provide feedback about the improvements that need to be made. Its also a way for brands and companies to monitor their progress and make proper adjustments.

This is an incredible perspective when looking at how best nurture customer satisfaction. I do think it's important to see shifts over time as it relates to relating to customer support and how technology/social media have enhanced companies' ability to create relationships more quickly and efficiently.

I would agree that consumers who are active on social media platforms are the one who a) get more exposed to brands' marketing activities and b) are able to drive attention by generating more word of mouth. However, I liked the added touch when you noted that 'all customers are important'. Indeed they are!

Mikko / Jason – Agreed. All customers are important. And as you've seen here, we found that communicating with them in the environment they find comfortable helps to get more customers in the mix of the “social” relationship. For some, they prefer email, for others they prefer phone calls, and some prefer some kind of anonymity in an online interaction and we are happy to be able to support that to. In debt relief for some anonymity is very important. While in most cases I'm an advocate of transparency, here I found a compelling reason to offer anonymity.

Before Social Media arrived, companies tried (and still do) to connect with customers, for example, through customer support, technical support and other feedback mechanisms. At best, it’s hit and miss.

And remember they’ve been doing this for several decades, so it’s not for lack of effort.

With Social Media we’re revisiting some of the same ground BUT the customer/prospect has more of a voice and is better informed.

If I was advising someone on implementing Social Media strategies, I’d strongly encourage them to review their current commitment to customer support etc…. and fix this first.

I know that’s not a hip and trendy thing to say but I do feel there is some merit in the exercise.

OMG Ivan ~ You are so right on! Social media will not remove existing customer service problems. It will exacerbate them. So if you don't have your customers service “house” in order, social is definitely going to add to the problem. Great point!

Great post, Jason. Social media creates an incubator for further sales because it strengthens the relationship. I did a standing ovation for you after this paragraph:

“The point is that when your company fosters a relationship with customers, then each customer … every single one of them … has the potential to become more valuable in dollar figures and relationship metrics to your company. While we’ll never reach a point where all people are social media customers (traditional channels are not going away), the more customer nurturing we can do through social media can prove more valuable to our businesses.”